Groupama // Universal Registration Document 2022

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FINANCIAL STATEMENTS Annual financial statements and notes

The reserve for increasing risks defined in Article R. 343 ‑ 7 of the French Insurance Code is the difference between the current values of the commitments taken respectively by the insurer and by the policyholders for insurance operations covering health and disability risks. This reserve concerns the reserves formed in long ‑ term care insurance as well as those on business accepted. The amount of this reserve is indicated in Note 11. The actuarial reserves for annuities are based on the discounted values of annuities and annuity ancillaries still owed at the inventory date. This item includes the reserves set aside against direct business and supplementary reserves on inward reinsurance business. The actuarial reserves for annuities, as determined by the regional mutuals and accepted by Groupama Assurances Mutuelles, represent the actual value of their commitments relating to annuities plus their ancillary expenses. The tables applied to assess these reserves are computed with a financial discount and are based on demographic trends. In life and health insurance, the actuarial reserves for temporary and permanent disability annuities are determined according to Article 143 ‑ 2 of ANC regulation 2015 ‑ 11. The discount rate used is 60% of the average TME of the last 24 months plus 10 basis points. Actuarial reserves for payments made for traffic accidents occurring on or after 1 January 2013 include an annual adjustment with an inflation rate of 2%. For disability annuities in progress, the reserves are determined by applying the maintenance and disability tables in Articles 600 ‑ 2 and 600 ‑ 4 of the annex to ANC regulation 2015 ‑ 11. Regarding actuarial reserves for non ‑ life annuity income, the business also incorporates the population’s lengthening life expectancy. Consequently, actuarial reserves for additional non ‑ life annuity income are posted at the balance ‑ sheet close in order to calculate the principal to be paid to victims of bodily injury. These are now based on the TH/TF 2000 ‑ 2002 mortality tables. Pursuant to Article R. 343 ‑ 5 of the French Insurance Code, a reserve for liquidity risk is allocated when investments subject to Article R. 343 ‑ 10, with the exception of amortisable securities that the Company is able and intends to hold until maturity, are found to be in a situation of overall net unrealised capital loss. This reserve is intended to deal with insufficient liquidity of investments, especially when there is a change in the pace at which claims are paid. The allocation to this reserve is spread over a period in accordance with the provisions of the French Insurance Code.

3.1.6 Equalisation reserve Pursuant to Article R. 343 ‑ 7.6° of the French Insurance Code, an insurance company may establish so ‑ called equalisation reserves to cover extraordinary expenses relating to operations to guarantee risks due to natural factors, nuclear risk, risks of civil liability due to pollution, space risks, as well as risks relating to attacks, terrorism and air transport. These reserves are funded voluntarily. Groupama Assurances Mutuelles computes this reserve based on the share of risks it insures or reinsures or that is obtained through its share of the results owing to its shareholding in certain professional pools. The amounts of these reserves are indicated in Note 11. Other underwriting reserves A reserve for unexpired risks is allocated when the estimated amount of claims (including management costs) that could be reported after the year end on policies written up before that date exceeds the reserve for unearned premiums. 3.1.7 The estimated value of reserves for claims is based on an actuarial approach, defined in accordance with a group methodology. By means of valuations of final costs based on payment triangles or costs (by risk segment), this method permits a determination of the sufficient amount of outstanding claims reserve (in accordance with Article R. 143 ‑ 10 of ANC regulation no. 2015 ‑ 11). This valuation includes the valuation of delinquent claims and expected recoveries in its approach. The amounts of these reserves are indicated in Note 11. In construction risk, the reserve for claims yet to be made comprises direct claims and claims from the regional mutuals is two ‑ pronged. One component is set aside for ten ‑ year coverage for general liability and the other is for ten ‑ year coverage for property damages. This reserve is determined in accordance with the provisions of Articles 143 ‑ 14 and 143 ‑ 15 of ANC regulation no. 2015 ‑ 11. The outstanding claims reserves for payments made for traffic accidents occurring on or after 1 January 2013 include an annual adjustment with an inflation rate of 2%. The underwriting reserves for incapacity and invalidity benefits are calculated in accordance with Article 143 ‑ 12 of ANC regulation no. 2015 ‑ 11. The discount rate used is 75% of the average TME of the last 24 months. reserves also include charges for management fees determined on the basis of actual expense rates observed by Groupama Assurances Mutuelles.

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Universal Registration Document 2022 - GROUPAMA ASSURANCES MUTUELLES